Compare Title Loan Companies Before You Sign A Contract
As consumers we shop around for the best deals when it comes to car loans and mortgage rates. It’s not uncommon to compare offers from multiple lenders when looking to buy a house. When it comes to getting a title loan, it’s best to use that same strategy to get the best lending terms. With that, it’s not always easy to compare different companies and what they offer. Shopping around for any type of personal loan can be somewhat daunting. Different lenders have various offerings and requirements. You may feel intimidated by meeting with a local lender. Or you may feel less safe working with a company that does everything online. We’d like to help you gain the knowledge to go out and shop for the best car title loan. Knowing what questions to ask will ease the process and help the banker provide and gain insight into your application.
To start you should visit a company that you’ve worked with in the past. This increases the likelihood of getting approved for the best rates and terms. Then, reach out to other collateral lenders for a comparison. Comparison criteria include, but are not limited to: interest rate, repayment schedule, and loan amount cap (how much you can borrow). During these consultations, the underwriter will likely ask questions about your personal situation. For example, why are you applying for an online title loan, how much are you looking to borrow, and what your credit score is like. Max amounts for borrowing money with your pink slip will max out at around $50,000. This means you will only be able to borrow up to that amount, depending on your credit and income. The main variable here is based on how much your vehicle is worth. The more your car is worth, the more you’ll be able to get by using your car as collateral for the secured loan.
Find an online lender that best fits your budget
Ask the rep how long you have to repay the debt (could be 2-3 years or more/less) and what the minimum payment amount would be. Ask if it is possible to prepay without paying any penalties. It’s important to find a company that lets you pay off the title loan earlier. This mitigates the risk of huge interest rates down the road that we often see with this type of borrowing. Do you have a checking account at a bank or credit union? If so, see if you can have the monthly payment deducted automatically each month. See if you would qualify for a discount (of up to 2% in some cases) by doing an automatic withdraw. Also, inquire about moving your accounts to the bank to qualify for a favorable interest rate.
The interest rate on a personal loan can vary based on your credit rating and online lending conditions. No matter what, your interest rate with a car title loan is going to be high. Before signing a vehicle equity loan contract, see if there are any alternative options, such as a home equity loan or credit card cash advance. This is especially useful if you are a homeowner and have a good amount of equity in the property. This method could cut your interest charges significantly and you’ll be able to keep driving your car! Don’t hesitate to compare different loan companies that provide online funding more than once. Armed with the above tips, you are now better able to handle a meeting with a lender to qualify for an auto title loan. Ask the company as many questions to make an informed decision. This could save you thousands of dollars in the long run.